New Jersey takes strong action against ACA sabotage: A look-back

As Republican repeal of the ACA's individual mandate loomed last fall, potential remedies for states became self-evident, notwithstanding many political roadblocks. No one had ever challenged a state's authority to impose an individual mandate. And state reinsurance programs had already proved their worth and obtained federal funding.

New Jersey, with strong Democratic majorities in both houses of the legislature and a newly elected progressive governor, was one likely proving ground -- notwithstanding the mandate's unpopularity and the state's fiscal woes. Progressives committed to a working individual market and resumed progress expanding healthcare access were eager to see these remedies tried -- under the tight schedule imposed by insurers' June 20 deadline to file rate requests. The legislature came through, passing mandate and reinsurance bills on April 12. After a long and rather conspicuous silence, Governor Murphy signed them yesterday.

Below is a compendium of my posts and articles on this front, as well as outside efforts with BlueWaveNJ and the NJ for Health Care Coalition that I've been involved in. They address the fiscal challenges as well as the case for the bills.

Sabotage judo: States can turn individual mandate repeal to their advantage (12/14/18)
Impose a mandate and use the revenue to help fund reinsurance

How Gov. Murphy can protect NJ from Obamacare sabotage (NJ Spotlight, 1/17/18)
Specifics for New Jersey -- e.g. death spirals past

NJ for Health Care Coalition urges Gov. Murphy: Protect our care. Sign these bills

Update: Murphy signed both bills today!  The Star-Ledger' Susan Livio cites the Coalition letter linked to below.
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New Jersey Governor Phil Murphy has been notably quiet about two ACA-defense bills awaiting his signature -- one creating a state individual mandate, the other directing the Dept. of Banking and Insurance to seek federal funding for a reinsurance program for the individual market.

The bills passed both houses of the legislature on April 12; the Governor has until June 7 to act. His hesitation, if there's more to it than due diligence, may stem from fiscal worries about the reinsurance program, as I've noted before.

Today the NJ Coalition for Health Care, an umbrella group of advocacy groups, trade groups, and unions led by New Jersey Citizen Action, sent a letter to Governor Murphy urging him to sign the bills. 17 organizations signed, including BlueWaveNJ, a group I volunteer for. The text is available here.

How Democratic candidates should talk about healthcare

The moderate/establishment candidate for the Democratic nomination in New Jersey's 7th Congressional District (a seat very much in play), Tom Malinowski, takes what in my view is an admirably substantive, focused, big-picture healthcare position:

On healthcare, Malinowski said he “does not support Medicare for all, but the idea of a Medicare option for all is worth exploring.” He said he’s spoken to many people who appreciate having healthcare options and he “would not force anyone to give up private health insurance which many Americans are happy with,” though he added that expanding a Medicare option could eventually lead to a single-payer type of system if people chose it voluntarily.

This more or less describes the Center for American Progress's Medicare Extra proposal and the Merkley-Murphy Choose Medicare Act. Those proposals in turn hark back to early versions of the public option, in which a Medicare-ish program was an 800-pound gorilla that private insurance was privileged to compete against if insurers or employers so chose. Some versions envisioned permanent competition between commercial/employer insurance and a public plan, while others expected a phase-out of private insurance (I discussed some of the variations here.)

Either way, my own view is that a public plan that employers and individuals can buy into provides a viable path either to a de facto all-payer system, in which commercial insurers pretty much have to pay similar rates to the public plan to survive, or to single payer.  And merits aside, I think Malinowski does a nice job in short space capturing both the conservative and the transformative appeal of a strong public option set alongside employer-based insurance. It's too bad that Democrats backed away from this model.

Trump's CSR cutoff boosted ACA enrollment in the 300-400% FPL income bracket

This is to follow up, x-post, on a factoid I noted early this month: while enrollment in HealthCare.gov states was down 5% overall in 2018, and down 7.5% among those with incomes up to 200% of the Federal Poverty Level (FPL), it was up among wealthier subsidized enrollees. All of the absolute gain came in the 300-400% FPL range.

Enrollment at 200-400% FPL in HealthCare.gov States

Year	200-250% FPL	250-300% FPL	300-400% FPL	Total 200-400% FPL
2017	1,312,520	752,403	786,678	2,851,601
2018	1,277,488	747,165	867,198	2,891,851

That's actually quite striking. In the prior post, I noted

If enrollment in the 200-400% FPL range had been down 7.5% in 2018, as it was in the 100-200% FPL bracket, there would be 254,000 fewer enrollee in HealthCare.gov states than there are now. If the impact in the states that run their own marketplaces was proportionate, that suggests 342,000 fewer enrollees had the federal government continued to reimburse insurers for CSR.

Most of that gain attributable to silver loading occurred in the 300-400% FPL income bracket. If enrollment in this bracket were down 7.5%, there would be 140,000 fewer enrollees in HealthCare.gov states (and probably about 188,00 fewer nationwide).

The difference is almost certainly due to the silver loading of CSR costs (see note below), which created discounts in bronze and gold plans that chiefly benefit those with incomes above 200% FPL (below that level the free CSR benefit outweighs the gold/bronze discounts).  So let's look at metal level selection in the 300-400% FPL bracket in 2017 and 2018.

Note: CMS broke out gold selection in 2018 but not in 2017. So the 2017 "gold" line  is derived by subtracting bronze, silver and 1% of enrollment at this level (approx 7900) for catastrophic and platinum,  which together totaled 1 % of enrollment across all income levels [updated 8/9/18].

Enrollment by metal level at 300-400% FPL in HealthCare.gov States

Year	Total bronze	% bronze	Total silver	% silver	Total gold	% gold	Total
2017	316,400	40%	409,600	52%	52,500	7%	786,678
2018	466,000	54%	284,400	33%	116,200	13%	867,198

Enrollment totals at the metal levels are derived from whole-number percentages provided by CMS.
Source: CMS State Level Public Use Files, 2017 and  2018.

Bronze enrollment in this income bracket was up by about 150,000 (47%) in 2018, and gold was up by about 64,000 - well more than double.  Silver was down 125,000.

Takeup of subsidized marketplace plans has always been poor in the upper ranges of income eligibility. The bronze/gold discounts made available by Trump's cutoff of federal funding for CSR plainly improved takeup in the upper income range.

There is another factor in the enrollment spike at 300-400% FPL. A higher percentage of enrollees in this income bracket was probably subsidized in 2018 than in 2017. That's because of the huge spike in premiums in 2018. In previous years, younger enrollees in particular with incomes as low as 250% FPL did not qualify for subsidies, because unsubsidized premiums required of them an "affordable" share of income (almost 10% in the 300-400% bracket).

This year, the impact of slipping just below the subsidy line was magnified by the bronze/gold discounts. An older buyer in particular who might have had just a $10/month subsidy for a benchmark silver plan might find a much more dramatic discount in bronze or gold.

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Note on Effects of CSR funding cut-off 

When Trump cut off federal reimbursement of insurers for the Cost Sharing Reduction subsidies they're legally required to provide to lower income ACA marketplace enrollees who select silver plans (57% of marketplace enrollees in 2017), most states allowed or required insurers to concentrate the cost of CSR in premiums for silver plans only. States in which 70% of individual market enrollees live concentrated the cost of CSR in on-exchange silver plans only, allowing for cheaper silver plans to be sold off exchange.

Since ACA premium subsidies are keyed to the price of the benchmark (second cheapest) silver plan in each rating area, subsidies rose to cover inflated silver premiums, generating often dramatic discounts in non-silver plans, i.e. gold and bronze (platinum availability and purchase is negligible). In many states, steep increases in silver plan premiums resulted in zero-premium bronze plans becoming available to many buyers (or nominal $1-3/month premiums), and gold plans that were either cheaper than silver or close in price.

Cheap gold plans were a particular boon to enrollees with incomes between 200% and 400% of the Federal Poverty Level (FPL). These buyers are not eligible for strong CSR, which makes silver plans roughly equivalent to platinum plans for buyers up to the 200% FPL threshold. Normally,  enrollees in the 200-400% FPL range would pay between 6% and 10% of their income (percentage rising with income) for a benchmark silver plan with an actuarial value of 70%, i.e. with an average deductible of around $3600). With CSR priced into silver plans in 2018, gold plans  (80% AV, with an average deductible of around $1100) came 

Trump's CSR cutoff is still reverberating

There is a kind of settled wisdom by now about the effects of Trump's cutoff of federal reimbursement of insurers for the Cost Sharing Reduction (CSR) subsidies they are obligated to provide to qualifying low-income enrollees in the ACA marketplace.

The story line: 1)states and insurers reacted swiftly and rationally by "silver loading" (explained below); 2) confining silver loading (explained in note at bottom) to on-exchange plans holds the unsubsidized harmless from the pricing in of CSR; 3) virtually all states and insurers will arrive at this solution; so silver-loaded CSR is now baked in, benefiting subsidized enrollees and not harming the unsubsidized. 4) Only further administration sabotage -- banning silver loading -- can disrupt this new normal.

The story line is essentially on target. About two million subsidized enrollees took advantage of bronze/gold discounts in 2018. The availability of those discounts probably helped offset other shocks to the system -- a halved enrollment period, radical cuts in outreach and enrollment assistance; insurer uncertainty as Republicans came within a whisker of repealing the core programs of the ACA.  Going forward, CBO estimates that silver loading will boost enrollment by 2-3 million per year (though I'm pretty sure the boost was in the low-to-mid hundred thousands in 2018, when silver premiums rose almost twice as much as gold and bronze). Further, some 70% of enrollees were in states where silver loading was concentrated on-exchange.

But that's not the whole story. Trump's threat to cut off CSR payments loomed for nine months before he pulled the trigger and was a major component of the general uncertainty insurers faced while filing rate proposals or deciding whether to participate in the marketplace. The effects of that uncertainty on premiums is, I suspect, not entirely captured by the calculated priced-in cost of CSR.  And now, here cometh the Congressional Budget Office to remind us that sudden policy changes have lingering effects, and the CSR shakeout isn't fully shaken out.

In New Jersey, ACA reinsurance or....?

Here in Jersey, progressives are urging Governor Murphy to sign two bills designed to fend off Republican sabotage of the ACA. The first would establish a state individual mandate to replace the effectively repealed federal mandate. The second would seek federal funding for a reinsurance program for the individual market for health insurance, designed to reduce premiums by 10-20%.

If the two bills are enacted and the ensuing waiver application seeking federal funding for reinsurance is approved, the two measures should reduce premiums by 20-30%, compared to where they'd be if no action is taken. For more detail, see this writeup.

Governor Murphy is likely to sign the mandate bill, but there are indications that he may seek changes to the reinsurance bill. The problem is cost.

Rough projections are that revenue from the mandate would cover a third to half of the reinsurance program's costs, while the federal government picks up half or a bit more than half. The state could be on the hook for an additional $30-40 million per year. New Jersey is in dire financial shape;  Murphy has a lot of spending priorities, and a looming fight on his hand to raise new revenue.

State Senator Joseph Vitale is confident that if the program proves to need more funding by FY 2021, when the first bill to insurers comes due, a revenue source can be developed -- probably via an assessment on insurers. Murphy might seek to get that in writing, in the bill -- as it was in an early version.  He would do so by issuing a conditional veto, after which the legislature would have to vote on an amended bill by June 7.

I found myself mulling this evening: If the bid to stand up a reinsurance program fails, how else might the mandate revenue, projected at about $90-100 million per year, be deployed to boost healthcare access in the state? One answer might be simply to return the mandate revenue to those hurt most directly by rising premiums: enrollees in the individual market who don't qualify for federal subsidies (subsidized enrollees pay a fixed percentage of income for a benchmark plan and so are not directly affected by premium hikes). These are mostly people above the income eligibility threshold, 400% of the Federal Poverty Level (FPL). They also include people who are ineligible for subsidies because of an offer of insurance from an employer.

Four ways states can leverage ACA sabotage

Sabotage of the ACA by the Trump administration and the Republican Congress will partially reverse the ACA's coverage gains, causing hardship to millions. But it differs from Republicans' failed legislative repeal in a fundamental way: The ACA's funding streams and mechanisms remain in place.

Not only can states that retain the will to make the ACA work continue to tap federal funding -- if they're willing to be creative, they can tap revenue streams created and inflated by the sabotage. Each form of sabotage has created new opportunities. There are at least four ways that states can not only fight off sabotage, but leverage funding opportunities that sabotage has created.

In Health Affairs: If CMS ends silver loading

I've co-authored with David Anderson, Charles Gaba and Louise Norris a blog post in Health Affairs that surveys the fallout from Trump's cutoff of federal funding for Cost Sharing Reduction subsidies in 2018 and considers the likely effects if the Trump administration moves to block the current effective strategies that most states have employed for dealing with that cutoff.

That is, what happens if CMS administrator Seema Verma and/or HHS Secretary Alex Azar move to block states from allowing or instructing insurers in the individual market to price CSR into silver plans only, a strategy that has created discounts in gold and bronze plans?

Part one recounts the history of how states and insurers found their way to silver loading. Part two quantifies how many people likely benefited from discounted bronze and gold plans. Part three reviews the impact of the CSR cutoff on unsubsidized premiums. And Part four considers the likely effects on plan pricing and enrollment if HHS/CMS either forces individual market insurers to spread the cost of CSR evenly among all ACA-compliant plans or to spread it evenly among all plans sold on-exchange only.

Hope you'll take a look.

A "modernist' C.S. Lewis?

Continuing vacation-week repostings of the nonpolitical...

(8/17/14) Lev Grossman, a fantasy writer whose works I have not yet been privileged to read, has a wonderful, wonderful, wonderful tribute to C. S. Lewis, who brought him into the worlds of reading and of fantasy. He focuses first on a passage that I used to xerox for students, also trying to capture its magic:

Even more than that, it’s the way he uses language—which is nothing like the way fantasists used language before him. There’s no sense of nostalgia. There’s no medieval floridness. There’s no fairy tale condescension to the child reader. It’s very straight, and very clean—there’s no Vaseline on the lens. You see everything clearly, not with sparkles or a flowery sense of wonderment, but with very specific physical details. Look at the attention to detail as you watch Lucy going through the wardrobe:

This must be a simply enormous wardrobe!" thought Lucy, going still further in and pushing the soft folds of the coats aside to make room for her. Then she noticed that there was something crunching under her feet. "I wonder is that more mothballs?" she thought, stooping down to feel it with her hand. But instead of feeling the hard, smooth wood of the floor of the wardrobe, she felt something soft and powdery and extremely cold. "This is very queer," she said, and went on a step or two further.

Melt like wax into God or be born into her womb?

Continuing vacation posting of old non-political bits...

Kierkegaard, Julian, Obama

(5/5/13) -- Who knows what governs how a moderately engaged undergraduate makes sense of abstruse philosophic texts? As a sophomore, my mind settled on a basic dichotomy: Hegel bad, Kierkegaard good. This was probably what you might call a gendered thought. Hegel's basic How-Things-Work was to my mind aggressive, imperialist, male: thesis absorbs antithesis in new synthesis. Man slays dragon, eats its heart, becomes (relative) superman. Kierkegaard, by contrast, kept apparently irreconcilable opposites in eternal balance, on an eternal toggle switch whereby they could be seen alternately as part of a unity and eternally distinct.

I can't tell you at this distance whether my abstract caricature is accurate, but it has stayed with me all my life, and I tend to class thinkers on one side or the other of this divide. In retrospect, I'm sure that I placed the subject of my dissertation, the medieval mystic Julian of Norwich (an achoress, i.e. a nun in self-imposed solitary confinement) on the Kierkeaardian side of the ledger, though I never zoomed up the centuries to probe the association. *

Julian had a brilliant trick of subordinating the harsh elements of Catholic dogma that she didn't like (the damned are damned forever) to those that she felt by force of direct revelation to be true (all will be well, and all will be well, and all manner of things will be well).  Her basic dynamic was that God-as-man maintains two "cheres," or points of view: the human, limited one, whereby we must see and condemn our own sin, and the "inward, more ghostly" and more strictly divine one, whereby no one does anything except by God's will, and God is delighted with all, and sin is merely an instrument of human self-education.

"New Jersey is poised to fight off ACA sabotage. Is Gov. Murphy on board?"

As Ive noted before, while the New Jersey legislature has passed bills establishing a state individual mandate and a reinsurance program, Gov. Murphy has not committed to signing them. I have an op-ed up on NJ Spotlight arguing that the need is urgent.:

The Congressional Budget Office forecast that mandate repeal in itself would generate premium increases of 10 percent per year throughout the next decade. An analysis of the impact on states commissioned by Covered California the state's ACA marketplace, put New Jersey in the highest risk category, where premiums are forecast to rise as much as 90 percent over three years if action is not taken to strengthen the markets. Early insurer rate requests filed in Virginia and Maryland are showing sky-high increases. Maryland's insurance commissioner is warning of a death spiral and placing hope on the state's reinsurance waiver proposal.

If there's any sticking point, it's probably related to cost. Here is an outtake with someone more detail than I had space for:

Outside our diseased political realm...

Good morning! I'm going to be on vacation for a week-plus, and probably not blogging healthcare. In the interlude, I thought I'd re-post a few non-political entries. The first, below, is from January 2010. I also have a couple of healthcare articles placed elsewhere (one a co-byline) that should drop during my time away. I'll post links when that happens.

A Cliff note for deconstruction

(1/8/10) -- Deconstruction, the literary theory that "attempts to demonstrate that any text is not a discrete whole but contains several irreconcilable and contradictory meanings" (Wikipedia - a definition as good as any) has been popularly regarded as an arcane, perverse bit of wizardry on the border between fraud and rocket science. I always felt that it demonstrated itself pretty well empirically (though logically, it should also unravel its own propositions...).

One Shakespeare sonnet, No. 24, always seemed to me to capture the idea in a line - the one bolded below.

Mine eye hath played the painter and hath stelled
Thy beauty's form in table of my heart.
My body is the frame wherein 'tis held,
and perspective it is best painter's art.
For through the painter must you see his skill
To find where your true image pictured lies,
Which in my bosom's shop is hanging still,
That hath his windows glazed with thine eyes.

Virtually no enrollment loss in state-based ACA exchanges in 2018

I imagine it's been noted before, but states that run their own ACA exchanges collectively had virtually no enrollment losses in 2018, while enrollment in the 39 HealthCare.gov states shrank 5%.

The loss even among unsubsidized exchange enrollees in the state-based exchanges (SBEs) was very slight, just 1% -- compared to 10% in the HealthCare.gov states. After Trump cut off federal funding for Cost Sharing Reduction (CSR) subsidies, most of the SBEs silver-loaded CSR costs on-exchange, and allowed insurers to offer silver plans off-exchange with no CSR priced in (for an explanation, see note below). That includes California, which accounts for almost half of SBE enrollment. It might therefore have been expected that more unsubsidized enrollees in the SBEs would have moved off exchange. And where unsubsidized on-exchange enrollment did drop, it will be hard to determine if many may have enrolled in ACA-compliant plans off-exchange.

Will Trump's cutoff of CSR reimbursement boost ACA enrollment by 2-3 million, per CBO?

Trump's cutoff of federal funding for Cost Sharing Reduction subsidies (CSR) last October created discounts in bronze and gold plans for many subsidized enrollees in the ACA marketplace, as explained below.  The availability of these discounts partly offset other forms of sabotage, so that on-exchange enrollment was down a relatively modest 5%.

On May 3, CBO Director Keith Hall estimated in a blog post that the CSR cutoff has boosted or will boost marketplace enrollment by an astonishing 2-3 million. The verb tense and time frame is ambiguous, per below (my emphasis). The estimate surely does not apply to 2018 -- I doubt the enrollment boost this year exceeded 500,000, for reasons explained below.

Here's Hall's explanation of how the CSR discounts came about and their likely effects:

On the basis of an analysis of insurers’ rate filings, CBO and JCT estimate that gross premiums for silver plans offered through the marketplaces are, on average, about 10 percent higher in 2018 than they would have been if CSRs were funded through a direct payment. The agencies project that the amount will grow to roughly 20 percent by 2021.

Silver loading yields some gold dividends in Kansas

Quick: what changed in the Kansas ACA marketplace in 2018, besides a shortened enrollment period?

Metal Level Selection in Kansas, 2018 vs. 2017

2018

	Bronze	Silver	Gold	Catastrophic	Total
% of total enrollment	28%	50%	21%	1%	100%
Number enrolled	27,867	48,679	20,765	927	98,238

2017

	Bronze	Silver	Gold	Catastrophic	Total
% of total enrollment	26%	65%	8%	1%	100%
Number enrolled	25,412	64,735	7,816	817	98,780

Yup. For two thirds of enrollees, the cheapest gold plan was cheaper than the cheapest silver -- the exceptions being those in Johnson and Wyandotte counties (adjacent to each other), together home to two thirds of the state's marketplace enrollees.* Hence gold enrollment nearly tripled statewide, whereas gold takeup was half the statewide total in Johnson County (10.5%) and one third in Wyandotte (6.5%).*